Question

If expansionary taxation policies encourage growth, are they always appropriate to implement? No, government services could create inflation, which decreases the purchasing power of consumers. Yes, the private sector can easily and affordably replace all services and facilities cut by the government. No, the government is capable of providing many but not all services individuals and businesses need. Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.

Answer 1

The Answer is A

Step-by-step explanation:

No, government services could encourage growth but other practices could be more effective based on the economic situation.

Answer 2

Answer: No, government services could create inflation, which decreases the purchasing power of consumers.

Expansionary fiscal policy is when the government expands the money supply in the economy. It can either increase government spending or cut taxes. This provides consumers and businesses more money to spend.

The purpose of expansionary fiscal policy is to boost economic growth. It is used when the government wants to reduce unemployment, increase consumer demand, and avoid a recession. If the recession has already occurred, it seeks to end it.

The policy comes with some risks. High inflation is one of the most common ones. There is also a time lag between when a policy move is made and when it works its way through the economy, which makes analysis difficult.